By SHANNON HAUGLAND
Sentinel Staff Writer
The Assembly at tonight’s special budget meeting will review the fiscal year 2024 budgets for enterprise and internal service funds.
The meeting is at 6 p.m. at Harrigan Centennial Hall.
Enterprise funds are those that are run similar to businesses. Several, including electricity, garbage, sewer, water and harbors, are supported by fees paid by ratepayers. The marine service center, airport and Gary Paxton Industrial Park, are supported by lease revenue.
Internal service funds provide services within the city and are supported by charges to the city departments using the services. Those include central garage, IT and building maintenance.
Utility rate increases have already been reviewed by Assembly members, who so far have not objected to the proposed higher rates.
Proposed are increases for electricity, 3 percent; water, 6 percent; wastewater, 8.5 percent; solid waste, 6.75 percent; and harbors, 7.3 percent. The Port and Harbors Commission has reviewed and recommended the rate increase for harbors to support operations and capital projects.
City Finance Director Melissa Haley explained that the proposed electric rate increase is less than the rate of inflation (5.4 percent in Alaska in January), because the city re-funded its bonded debt at a lower rate for projects such as the Blue Lake dam and Green Lake dam.
“It’s a temporary reprieve,” Haley said. “We expect as we map out future needs the rate will have to be higher to assure continued service.”
The Assembly will review the list of capital projects in each of the funds. The rate increases are needed to support capital projects, which are costing more because of inflation and the higher construction costs anticipated, city staff has said.
The city also has growing expenses to meet federal regulations, such as the effluent disinfection system for the city’s wastewater system at an estimated cost of $7.75 million. The city can apply for a low-interest loan from the state Department of Environmental Conservation to help defray costs, officials said.
Some of the major costs in enterprise funds are related to debt service payments, for such projects as the secondary water filtration plant in the water department; and the garbage compactor in the solid waste fund.
The city is working on a condition assessment in the harbor department and plans to put more resources toward completing that project, Haley said. Raw fish tax went up in FY22 to $1.75 million, from $907,384 in FY21 and $664,888 in FY20.
The second item on the agenda is for discussion on other items in the budget.
Haley said she has received good direction from the Assembly on most items to create the administrator’s draft budget for the general fund, internal service and enterprise funds.
She is hoping the Assembly tonight will confirm or change the Port and Harbors Commission recommendation on the moorage rate increase.
Another pending item is a decision on the funding level for Visit Sitka from the Visitor Enhancement Fund, which is supported by bed tax revenues. The city received $670,000 in bed taxes in FY2022, representing collections for the second half of the 2021 season and first half of the 2022 season.
The Gary Paxton Industrial Park has a major project on the horizon, a citizen-supported haulout for the commercial boat fleet. The city has hired an engineering firm for design work, and continues to apply for grants for the project that is expected to be completed in 2025.
